Managing financial resources and decisions

Extract

[...] Financial planning also helps businesses stay organized. Progress and change are inevitable in any business. Keeping a record of this helps businesses stay organized and stable. With time, plans are updated and revised to suit current situation and trends. Once identified, profiting trends can be followed. These trends help in future profits determination through estimation of future earnings and spending. Estimation of company's growth assists in market tracking and strategy making. It is upon this that actual results can be evaluated against projected ones (business essentials 2007). [...]

[...] Creditors such as banks and raw material supplier are very strict with the payment period. The government harbors interest in the financial statements. It's entitled to a percentage of the company's profit as tax. This makes the balance sheet a crucial statement to the government. Investors are the most skeptical persons in business. They tend so carefully that their money may not be misused. For this reason, they will scrutinize every available source of financial information available about a certain company before investing their money there. [...]

[...] In the case of an established organization; asset financing can be a good way of money generation. The assets of a company can be used when a company does not need them for income generation. Others like building can be leased to generate income. Franchising is a modern way of capital generation. Through franchise, the franchisor bears all cost on behalf of the franchisee and makes a pledge to paying it later. This is a clever means of starting a business since it involves less capital from the franchise. References Broadbent, M., & Cullen, J. (1997). [...]

[...] Managing financial resources and decisions II. Introduction III. Upon completion of preparation of the statements of finance, different users use it differently. IV. Sources of fund Managing financial resources and decisions Introduction Financial resource management is a process through which the management maximizes resources available through implementing controls and managing cost. This is made boosted by the use of financial statements that reflect the real position of the firm. In essence, financial planning is the brainchild of any investment. It facilitates decision making on the best investment, how much to spend on it and what to expect from the investment. [...]

[...] This combined form the capital base of any business. It is from the capital account which accounts to more than half the money used that a business grows. Companies retain some profit that would have otherwise been paid as dividend as retained profits. Retained profits /earnings act as an alternative source of capital. Companies use them for catering for appropriation of tax depreciation and bad debts. There are also external sources from which capital can be raised. Loan capital is the most common form of capital. [...]